In our last newsletter we looked at what age you should start financial planning. In this issue, we want to take things one step further and look at the importance of financial planning for the next generation.
Like all financial planning, we believe that by beginning early you can educate and manage expectations among the younger generations. Whether this is help with the intricacies of estate planning and the complex tax issues involved, or helping your children on their way to buying their first house, making sure that you and your family have an overall financial strategy and plan in place is key.
We don’t know what the future will hold, but at the moment it seems that giving your children a good financial base to begin their adult lives is more important than ever. As a parent, you should never underestimate the influence you have over inspiring your children to plan for their financial future. You can do a lot to instil and encourage good habits like saving and investment, but you can also set a good example when managing your own money.
If you think about it, the younger generation are the custodians of your family assets, so they need to be aware and understand what will be required of them in the future. A comprehensive financial plan which includes them will enable them to:
- Understand their obligations
- Explore the options available
- Decide the best route
Depending on the age of your children, there are a plethora of things to consider, these may include:
- Funding your children’s school or university education
- Getting your children on the housing ladder
- Contributing to their wedding or starting a family
- Setting up a trust to protect your estate or assets from inheritance tax
- Implementing saving and investment plans
- Helping your children get on the road to financial success with “the gift of a financial plan”
With sufficient time spent with a financial planning professional, you and your family can have a wealth transfer plan that is both tax-efficient and ensures your wishes will be fulfilled. Including your children, whatever their age, in your meetings with financial advisors will put them in a strong position in terms of their knowledge and enable them to see the clear benefits of strategic financial planning. It will also greatly smooth the transition when they do need to step in as the decision makers and take ownership of any financial responsibilities they have; for both of your futures.